April 15th, 2013
in Gary's blogging
Opening Market Commentary For 04-15-2013
Premarkets were down some say as a surprise of a slowdown in the Chinese economic growth.
Markets opened down as expected (-0.60% to 0.70%) and slowly continued to melt lower with the $RUT leading the way at -1.54%. The $VIX remains in the 13 area after rising off the 12.02 yesterday. Red volume dominates the action and is moderate to heavy at times. Gaps were generated this morning indicating the upwards bull march may not be over, so do not get excited just yet.
Strange market but don't try to analyze it to much.
The morning news.
The New York Federal Reserve's regional manufacturing gauge slid to 3.05 in April from 9.24 in March, coming in considerably weaker than the reading of 7 economists expected. Readings above 0 point to expansion, while those below indicate contraction. U.S. stock-index futures had little reaction to the data.
Citigroup revealed first-quarter earnings of $1.29 a share on revenues of $20.8 billion, excluding the impact of debt valuation adjustments and other items. The Street was expecting earnings of $1.17 a share on $20.17 billion in revenues. Shares of the banking giant climbed more than 1% in pre-market trading.
Mining stocks were registering sharp falls on Monday morning as a surprise slowdown in Chinese economic growth weighed on the outlook for commodities demand.
China's first-quarter gross domestic product (GDP) growth dropped from 7.9% in the prior quarter to 7.7%, while the consensus forecast had been expecting an uptick to 8.0%.
The reading still remains above China's 2013 growth target of 7.5%, but will scale back hopes for any material upside surprise to official forecasts.
"Raw materials descended into sell-off territory as investors jittered over whether a slowdown in the world's second-largest economy will detriment demand for such materials," said Shavaz Dhalla, Financial Trader from Spreadex.
Dhalla also said that concerns about Cyprus were still a focus for stock markets this morning after reports suggested that the government is putting a large amount of its gold as collateral towards its financial aid.
"It seems investors are troubled with the nation's ability to meet their financial obligations and the detrimental consequences towards the gold markets if a default were to occur," he said.
The RRR** has been narrow at the opening bell for the past several months, over a year actually, and has continued the trend again today. This continuing trend makes predictions of session movements nearly impossible making trading futile and unprofitable. As of right now, it is too late to jump in to catch the highs and still may be too early to start shorting.
As long as market volume remains light or the trading range is narrow, one can expect successful, or at least profitable, trading to remain elusive. The RRR** has been wider on some volatile sessions lately and is expected to become more so as 2013 enters the second quarter, unfortunately a lot of guessing remains. Correctly 'guessing', of course, is the tricky part of the successful trading equation. Any trades today will probably end up on the meager side of profitability if you are lucky as most trades have been less than optimal during the past several years.
I also have continuing issues with some pundits, writing almost every day, that there are setups for day trading. Best Stock Market Indicator Ever: Rises to 90% and Secondaries Confirm "Tradable" This might be true (and surprising), but challenging to deal with. The trading range is so narrow that way too much money has to be put on the table just to get back meager gains. Do not fall into the trap of money burning a hole in your pocket, sit tight better days are coming. I keep hoping for increasing volumes to signal improved trading.
Swing trading is also at your own risk for all the reasons mentioned above although guessing overnight trades would have been most profitable over the past year. Again, guessing where the market is going to be tomorrow or next week, at this time anyway, can be a foolish and costly endeavor.
The DOW at 10:30 is at 14765 down 99 or -0.64%.
The SP500 is at 1577 down 11 or -0.73%.
SPY is at 157.74 down 1 or -0.68%.
The $RUT is at 927.62 down 15 or -1.61%.
NASDAQ is at 3268 down 26 or -0.81%.
NASDAQ 100 is at 2838 down 18 or -0.64%. (A lot of analysts are currently watching the 100.)
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish with a negative slant lately and the current bias is down.
WTI oil is trading between 91.12 and 88.08 today. The session bias is bearish and is currently trading up at 88.78.
Brent crude is trading between 101.29 and 100.34 today. The session bias is bearish and is currently trading down at 100.62.
Gold fell from 1487.86 earlier to 1384.25 and is currently trading down at 1393.39.
Dr. Copper is at 3.25 falling from 3.36 earlier.
The US dollar is trading between 82.49 and 82.14 and is currently trading down at 82.32, the bias is currently bearish.
** RRR = Risk Reward Ratio
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Written by Gary